Business summary
Business Name: Quenchy Java Coffeehouse (QJC)
Location: Castle Towers; Middle level
Quenchy Java Coffeehouse (QJC) is a specialty retailer of beverage that it set to be established in the middle level of Castle towers. QJC incorporates a new system currently being used by the food and beverage industry to ensure that it is able to conveniently provide its customers with cold and hot beverages in a very time-efficient manner. To make the service even better, QJC provides the customers with an opportunity to move in to our premise and make a special order; from our very own Barista, a blended custom drink that meets their specific needs. This coffee house specializes in a drink that is freshly brewed although other beverages are also provided. Having successfully ventured our services in gas stations, institutional offices and busy business malls, QJC is strongly optimistic that its investment is set to succeed in this building that houses more than 500 business offices.
Quincy ensures that its customers are provided with the best cold and hot beverage. As previously mentioned, this small sized business specializes in specialty coffee, together with other custom drinks such as blended tea. To maximize on satisfaction of the diverse customer tastes, the business will also provide freshly baked pastries, soft drinks together with other confections. As the season changes, the business will be able to boost its menu with additional beverages that will include frozen coffee, hot coffee, and apple cider among many other. This factor will be considered based on the fact that Castle Towers is a fast growing mall with customers that have diverse taste. Therefore these customers have specific drinking tradition that cannot be ignored but has to be considered. We also understand that there are more unique needs that the business will be unable to provide at the onset of the operations. These requirements have to be satisfied in the long run to ensure that we build a continually growing business that satisfies the unique needs of each customer.
Legal structure
QJC has been established as a limited liability company. All the shares of membership in the company are currently held by Barn Young and Theodore Big. The intention is to ensure that a portion of the shares will be utilized in raising more shares. In its plan, the business intents to sell some units of membership to the members of the family and other close friends. Each unit of membership to the business is going to be valued at $ 3,869, with each certificate requiring a minimum of six units. Alternatively, an investment of not less than $20,000 will be required for every investor.
Our vision and goals
QJC targets to emerge as the first priority coffeehouse not only for the Castle Towers building residents but also for the people living in the surrounding environment. This will be enhanced through our goal which is to provide the best services to the workers in this building, the daily visitors that frequently visit this building and its environment and any tourists. This will be enhanced by leading in terms of quality for the competitors to follow. Therefore the intention of this business is to ensure development of coffee houses that can attain a quick profitability and sustenance of an encouraging rate of return (more than 30 percent per year).
Aimed at serving everyone, QJC also target at contributing to the local community welfare by merging our support to the civic and charitable activities. Most importantly, we will provide support to the farmers that are involved with cultivation of out coffee through participation in fair trade, organic products together with sustainable production when possible. To support the success of various business players, QJC aims at awarding its business contracts to various local suppliers hence maintaining a community actively involved with business.
Objectives
1. Establishment of ten businesses in major buildings and entirely booked mobile coffee kiosks not later than in three years’ time.
2. Achievement of more than 50 percent in the gross margin (not less)
3. Ensuring that the net profit after tax exceeds 16 percent of the total sales.
Situational analysis
The business of specialty analysis can be traced back to the early 1980s after the purchase of Starbucks name by Howard Schultz (Behar & Janet 203). What followed next was a process of continuous expansion of the chain of modern Starbucks (Comaford 12). In this region, there has been a gradual of coffeehouse popularity with this concept being more than 300 years old (Pinson 20). Therefore in the recent past, coffeehouse investment has emerged as independent businesses with a typical extensive eclectic style.
Marketing
Basically, two markets will be targeted by Quincy Java Coffeehouse. The first category to be targeted will be the daily visitors to the business premises. This category will involve any persons traveling in and out of the building, out for shopping purposes, delivery of goods, or just exploring from within the building. The main reason for primarily targeting this category is based on conviction that most of the permanent business residents could at the moment be attached to other coffeehouses and it will hence take some time before we are able to fully convince them to consume our coffee drinks. This is as opposed to the daily customers from outside the building who do not have specific attachment to a particular coffee house. The second category targeted at long run will be the customers from within the building. These customers are restricted to this business environment and therefore may not have convenient time for moving in and out of the building in search for refreshments.
Operations
In addition to ensuring that our menu portrays our extensiveness in providing excellent services and ensuring provision of quality products, we will work effortlessly towards ensuring that the our customer loyalty and awareness is guaranteed in addition to good media and publicity coverage. In addition, we will ensure that 10 percent of our earnings are donated to the local charities depending on the choice of our esteemed customers.
QJC has a promising financial figure. Based on the fact that we are a cash operating business, we have an initial operating cost that is very low in comparison to most of modern start-up costs. In addition, we embark on a labor intensive process which makes the business to recognize the requirement of high level of talent. Investing our finances in our employees is hence one of the major factors that will differentiate this business from the competitors’. In favor of this pro-forma strategy, there is financing of the equipment and facility’s capital expenditures. A minimum inventory will be implemented to ensure that the products are maintained fresh together with taking advantage of the reduction in the prices, in case of such occurrences.
Initially, the anticipation of QJC is that long term financing totaling to $ 398,000 and investments will be able to enhance the growth of the business without having to incur debt or equity investment that will extend past the procurement of the facility. Clearly, this implies a slow growth than it would otherwise be probable. However although this is a slow growth, it is a progression that will be financially sound and solid. This growth will also be based on our products demands and customers’ requests.
The opening and operation of a coffeehouse in Castle Towers is not the end goal for QJC. Eventually, QJC targets to emerge to the level of Starbucks. In the first private and public offer, it targets to obtain a large amount of contribution that will enable the business to open 15 more Coffeehouse facilities in various major buildings located in this town which has a large supportive customer base. The main challenge comes from the possibility of the competitors establishing community foothold prior to or in the course of our arrival triggering a revenue drain loophole. This problem also has a likelihood of challenging our business to dramatically increase the expenditures on advertisement if the targeted market share has to be maintained. However, QJC is well aware and prepared for these risks and a good plain is in place. Therefore the business will maintain the required edge to ensure that this scenario is successfully implemented.
Finance
For the startup of the business, the following expenses will be incurred:
The legal expenditure through which the permits and licenses will be obtained will total to $1,250.
The expenses for marketing promotion that will also fund the grand commencement of the operations will amount to $3,000 together with the cost of printing the flier which will amount to $2,800 (a total of 1,500 fliers and each flier is approximated to cost $0.05).
The consultation charges will amount to $2,500. This is a payment for their assistance in venturing in this business. This amount is to be deposited into the bank account of CBA Expressio Services and the amount verified by the issuance of a receipt.
The total premium cost of insurance coverage is approximated at $1, 500. This insurance is to cover the workers compensation, general liability and casualty in the property.
The rent that will be paid one month in advance will amount to $3,680
Remodeling of the premise is approximated to cost $ 8,000.
Other expenses involved in the startup are utility and phone deposits and stationery purchase totaling to $3,000.
The assets required for the startup are as follows:
The total operating capital amount will be $ 56,000. This amount is inclusive of the owners and employees salaries totaling to $18,000 together with the cash reserves for the four first months after commencement of the operation amounting to $ 10,000 every month.
The inventory start-up totaling to $ 15,344 which will be inclusive of:
Coffee beans at the cost of $4,000.
Baked goods, coffee filters, sandwiches, salads, beverages and tea costing $5,000.
The cost of retail supplies amounting to $1,5000
Office supplies totaling to $ 145
The cost of equipment will be $ 45, 000 and will include
Coffee maker at $ 1000
Expresso machine at $7,000
Coffee glider at $ 180
Food service equipment totaling to $ 15,000
Storage equipment costing $3,000
Serving area equipment to cost $2,500
Additional miscellaneous expenses will be $ 1,000
The business funding comes from the investments of the owners and loans from the bank. The two main owners (Theodore and Barn) have made a contribution of $ 120,000 and $100,000 respectively. The total amount coming from the other investors totals $50,000, bringing the total contribution to $ 270,000. The balance amount that is needed to ensure covering of the remaining expenses will be borrowed from the bank in form of a one year loan and another five year loan which will be secured before commencement of the operation.
Human resources
In the first year, QJC projects a slow operation trend hence a few staff will be recruited. Total number of the employees by the end of the first year; including the administrative support and management is expected to be 10. A summary of the payroll is provided in the figure below.
Personnel plan
Year 1
Year 2
Year 3
Production personnel
$129,562
$387,200
$879,000
Mobile café team
$10,999
$140,000
$234, 088
Specialists of equipment care
$0
$20,000
$74, 067
Others
$0
$10, 200
$23,000
Sales and Marketing Personnel
$0
$21,987
$175,545
Forecasting
Three months after commencement of our operation, we are expecting a start off and extensive increase in the sales trend during the winter period. Quincy is expecting its average sales to hit more than $17,000 each month for the first year as the status and recognition is built in the surrounding business environment. During the second year, we will be looking forward to a massive increase in the customer base beyond Castle Towers to the neighboring buildings and towns.
Benefits to the shopping center
In a busy working environment, the customers (who are mainly workers in the premise) require convenience when it comes to accessing the basic needs. Within a short period of tea break, these customers can easily gain access to the coffeehouse for refreshment. Under special circumstances, busy working environment also require a coffee business that can conveniently meet the customers’ needs without these consumers having to waste a lot of time traveling to the coffee house (Michelli 20). With a special arrangement, we will also be making these deliveries to our customers’ offices. Therefore these customers will be able to enjoy the special cup of specialty blended coffee at the comfort of their office chairs. In addition through contribution to various charity organizations, the business portrays a good picture as one of the businesses in this shopping center that have been renowned for its contributions to the needy society. The business also presents an opportunity of being an equal employer in this business environment that has created employment to more than 2,000 people.
Works Cited
Behar, Howard & Janet, Goldstein. It's Not About The Coffee: Leadership Principles from a Life
at Starbucks, 208 pages. 2007.
Comaford, Christine. Making your Financing Pitch Sizzle. BusinessWeek. 12p. 2007. Retrieved
from; http://www.businessweek.com/smallbiz/content/feb2007/ sb20070219_940216.
htm? link_position=link3. Retrieved 2009-03-31
Michelli, Joseph. The experience: 5 principles for turning ordinary into extraordinary, 208
pages.2006.
Pinson, Linda. Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business and
Securing Your Company’s Future (6th Edition). Page 20. Dearborn Trade: Chicago,
USA.Page 20, 2004.
